Tata Tea, India's largest tea company, on Monday announced a 49.4 per cent drop in its net profit for the quarter ended December 31, 2000, owing to a decline in tea prices.
The company's Q3 net sank to Rs 16.45 crore ($3.55 million) from Rs 32.52 crore in the corresponding period of last fiscal.
Earnings per share declined to Rs 2.93 against Rs 6.69 the previous year.
Sales fell 13.5 per cent to Rs 202 crore, while other income slipped to Rs 45 lakh from Rs 12.52 crore in the year-ago quarter.
Analysts had expected profit to fall significantly as tea prices fell more than 18 per cent last year.
"Everybody knew that it was a disastrous year for the tea industry," said Mathew Easow of Mathew Easow Securities in Calcutta. "It was expected to take a beating."
The Kolkata-based company had issued a profit warning in August, saying its earnings for the full year to March were likely to be hit by low tea prices.
The decline in prices squeezed Tata Tea's margins in the second quarter as well. Net profit fell 22 per cent in the July-September quarter, although sales slid only 1.6 per cent.
Tata Tea's shares closed 2.04 per cent higher on the Bombay Stock Exchange ahead of the results, which were announced after the close of trading. The benchmark index rose 1.73 per cent on Monday.
Yet analysts said the third-quarter performance was not likely to hammer the company's share price when trading resumed on Tuesday.
"The present value of the shares is based on expectations of a lower profit in the third quarter," Easow said. The company said tea prices had started rising and were expected to increase further.